Banking Inspection And Examination As An Aid To Effective Bank Management

Banking Inspection And Examination As An Aid To Effective Bank Management

Chapter One

Preface

Statement Of Problem And Purpose Of The Study

Banking examination and examination as an aid to effective bank operation. Banking examination and examination is the act of covering mortal andnon-human coffers in the banking assiduity in order to make sure that the objects and pretensions of the bank are achieved and there’s proper record of account.

The end of this study is to probe how banking examination and examination will help banks to break the problem of bad and doubtful debts in the banking assiduity.

Explanation Of The Study

The following are the reasons for this study-

1. To ascertain the extent to which banking examination has helped in creating job security to its bank workers.

2. To examine the number of bad debt performing from loans given to guests that haven’t been recovered and provision made for forestallment.

3. To find out the extent to which banking examination had made provision for job security in the bank with a view to working problem.

4. It’s hoped that banks will take advantages of the suggestions from this work to embrace commitment and objective reporting for accurate record keeping.

5. To examine the examination and examination ways in the banks.

Significance Of The Study

The significance of banking examination and examination can not be over emphasized. This is because examination and examination is the only armament banks can use to amend and break the problem of bad debt so as to avoid liquidation and thereby affecting the growth and development of the country.

The people that will profit from this study are banks as it’ll help workers to observe programs and procedures of the banking ethics to strengthen the job security of staff for effectiveness growth and development restructure.

The result of this study or work may help produce the mindfulness needed for effective and effective auditing of the banks on a regular base.

Business associations and companies will also profit from this work.

Background Of Study

Section 61 of the Banking and Other Financial Institutions DecreeNo. 25 of 1991( BOFID) defined banking business as the business of entering deposits on current account, savings regard or other analogous account, paying or collecting cheques, drawn by or paid in by guests, provision of finance or similar other business as the governor of Central Bank may by order published in the review designate as banking business. The Nigeria banking system is made up of Central, Commercial, merchandisers and Development Banks. There are also the peoples bank and community banks lately developed or established by decree of the Federal Military Government.

Banking as a profession has was for numerous decades but unfortunately, there was no general accepted statutory description of a bank until 1969. Section 41 described bank as a person or company carry on the business of entering moneybags and collecting draft for guests subject to the obligation of honouring cheques drawn upon extent of the quantities available on their current account.

Generally bank plays vital places in the development of any nations. The banking assiduity occupies a central position within the setting of any nation’s frugality. thus, the failure of banks may lead to control the conditioning of the banks to enhance effective development.

The banks are covered and regulated by the government through its agency the Central Bank of Nigeria. This is to insure that they render services to their client in a manner harmonious with keeping operation and government fiscal policy. They also control their loans and advances and investing conditioning as these affect the freedom and capability of these banks to make gains. The credit guidelines issued by the financial authorities haven’t been adhered by banks as they pursue largely profitable business adventure indeed when similar meant exceeding their credit capacity. The problem of not abiding with the credit guiding inversely made it fairly insolvable to achieve their pretensions of effective profitable development assiduity.

Grounded on the below factors, the exploration is motivated to examine the extent to which inspectorate of banks are contributing to the effective operation of the banks coffers.

Description Of Terms

1. LOANS These are income generated by adopting from private individualities, banks or from foreign countries to finance a design.

2. GUARANTEES This is a written pledge made by one person called the patron or surely to be collaterally answerable for the debt, dereliction or confinement of another person called the top debtor.

3. ACCEPTANCE This is defined as a draft by one party and conceded by a alternate party. The hole who’s also the accepter prints or writes the word “ accepted ” on the face of the instrument and the place and the date of payment.

4. BANK EXAMINATION Is an on- point disquisition of the banks fiscal conditions, operation and programs by representatives( bank examines) of the nonsupervisory agencies.